With symbolic significance, a 6.0-magnitude earthquake hit Bali last week, at the very time the International Monetary Fund was holding its annual meeting on the Indonesian island. As Bali shook and its buildings swayed, it seemed a metaphor for the task that lay before finance ministers and central bankers from around the world. They had to assess the tremors rippling through the global economy and quake-proof the system as best they could.
They will need all the help they can get. With stock markets wobbly and the ground starting to shift under the multilateral trading system, what, if anything, can big business do to stabilise the outlook? Here’s an interesting idea promoted not too long ago by Michael R Strain, director of economic policy studies and resident scholar at the American Enterprise Institute: if big business wants to adopt a social cause, why not take up globalism?
Why not indeed? The suggestion goes to the heart of some of the gravest issues facing corporate America today. How will some of the US’s biggest brand names sell themselves overseas if everything is about “America First”?
For American big business it is essential, in Mr Strain’s words, to “focus on the values, policies and institutions that create long-term security and well-being”. Accordingly, corporations should champion the IMF, World Bank, World Trade Organisation and United Nations, as well as democracy, free trade, rule of law, openness to immigration and a progressive social agenda that covers women and minorities. In promoting international institutions and universal values, big business would in effect promote itself. At the very least, the corporate wagon will have been more securely hitched to a post-war system that has worked well for seven decades but is now under strain.
It is a truism that global brands need the rest of the world. That means markets, supply chains, delivery, customer care and name recognition that span the globe. For US brands with a global footprint, favourable opinion of the American way is an inherent advantage, and one they have capitalised on until recently. But that is changing. A new 25-nation Pew Research Center survey has found the world markedly less enthused today than it was two years ago by the idea of America. People in a wide range of countries expressed significant concerns about America’s role in world affairs as well as its perceived selfishness and unwillingness to help solve major global challenges. That is hardly a compelling sales pitch for America as a brand, or the goods and services its companies sell around the world. And the brand, as Coca-Cola has successfully proved over 132 years, is more important than the actual product. Or, as the US billionaire businessman and philanthropist Kevin Plank once put it, every great brand is like a great story.
Possibly the greatest branding story of our time is one that is yet to be told — an all-hands defence of the worldwide community of consumers and of market choice and access. This is the context of Mr Strain’s manifesto for big business. In promoting the post-war system, he says, big business would promote “prosperity in the future [and] its promotion is in the interest of the business community. Because over the long run, what’s good for business is good for us all.”
Back in 1970, economist and Nobel laureate Milton Friedman propounded a doctrine that discerned “one and only one social responsibility of business − to use its resources and engage in activities designed to increase its profits”.
But what’s happening in the US today, under Donald Trump’s presidency, is a business positioning strategy that goes beyond activities designed only to increase profits. Businesses such as Dick’s Sporting Goods, one of America’s largest sports chains, and Walmart, America’s biggest retailer and firearms seller have made restrictive changes to their gun sales policies to better reflect national anguish over mass shootings. Last month, the US sportswear giant Nike featured in its latest ad campaign Colin Kaepernick, former quarterback of the San Francisco 49ers and controversial campaigner against racial injustice and police brutality.
Nike and the other companies made their decision despite President Trump’s ire and the probable disapproval of customers within his voter base. But that they did so speaks to a developing culture of corporate social responsibility, which includes social goals as well as profit or earnings targets. That is right and proper. UCLA’s Professor George Steiner, one of the world’s leading thinkers on the relationship between business and society, once said, “As a firm grows larger, it has an actual and potential influence on more and more people: society then takes a greater interest in what it does, and the company in turn thinks more carefully about its responsibilities. It tends to become affected with a public interest.”
The defence of globalism is a public interest whose time has come. Big business must sell it. This is not bravery but business sense.